TAMC launches Nifty MidSmall Healthcare Index fund

Tata Asset Management Company (AMC) on Monday (April 8) announced the launch of six index funds. These index funds are designed to provide investors with exposure to key sectors having growth potential in the current economic landscape, Tata AMC said.

The new fund offer (NFO) of these schemes are available for subscription till April 22, 2024.

The minimum investment during the NFO period is ₹5,000.

Among the six schemes, three are industry firsts: Tata Nifty MidSmall Healthcare Index Fund, Tata Nifty500 Multicap India Manufacturing 50:30:20 Index Fund and Tata Nifty500 Multicap Infrastructure 50:30:20 Index Fund.

Here’s a look at six index funds:
Tata Nifty 500 Multicap 50:30:20 Infrastructure Index Fund
This scheme aims to replicate the performance of the Nifty 500 Multicap Infrastructure Index with allocation ratio of 50:30:20 across large-cap, mid-cap, and small-cap companies.

With public capital expenditure in infrastructure witnessing a significant surge and factories operating at optimal levels, this fund presents an investment avenue for those seeking exposure to India’s infrastructure sector, the fund house said.

Tata Nifty MidSmall Healthcare Index Fund
This fund mirrors the Nifty MidSmall Healthcare Index, capitalising on the favorable factors driving the healthcare industry, including robust margins, stable pricing pressures in international markets, and increasing health consciousness among consumers.

Tata Nifty Realty Index Fund
The index fund is positioned to tap into the real estate sector.

This fund tracks the Nifty Realty Index, potentially benefiting from factors such as soaring residential demand, rapid sales velocity, and a resilient balance sheet post-RERA implementation, Tata AMC said.

Tata Nifty Financial Services Index Fund
This fund aims to replicates the NIFTY Financial Services Index (TRI), offering exposure to a diverse range of financial services companies poised for potential growth.

The Indian banking industry is currently witnessing growth, underscored by its strong asset quality and robust performance metrics.

With a low default rate of 2.9%, attributed to minimal Gross Non-Performing Assets (GNPAs), the sector showcases resilient asset quality. Notably, the industry has experienced credit growth at 21%, coupled with 14% growth in deposits, reflecting a healthy financial ecosystem.

Furthermore, the increasing adoption of digital banking services is evident, with a notable 57% year-on-year growth in Unified Payments Interface (UPI) volume. ( Source: BCG Banking Sector Roundup 9MFY24)

Tata Nifty Auto Index Fund
The fund seeks to replicate the Nifty Auto Index and is designed to reflect the behaviour and performance of the automobiles sector which includes manufacturers of cars, motorcycles, heavy vehicles, auto ancillaries.

Tata Nifty 500 Multicap India Manufacturing 50:30:20 Index Fund
With India’s significant advancements, including its improved ranking in the World Bank’s Ease of Doing Business, driven by initiatives such as GST implementation, performance-linked investment scheme, RERA policy, and digitalisation, the manufacturing landscape presents compelling opportunities for investors.

Moreover, the fund’s focus on top-performing stocks from diverse sectors within the manufacturing theme aligns with India’s trajectory towards becoming a manufacturing powerhouse, Tata Mutual Fund said.

Index methodology
The index methodology for the Tata Nifty 500 Multicap 50:30:20 Infrastructure Index Fund adheres to stringent criteria to ensure optimal representation and performance.

With a focus on diversification and risk management, the index imposes maximum market capitalisation limits, allocating 50% to large-cap, 30% to mid-cap, and 20% to small-cap stocks.

The portfolio comprises of the top 15 large-cap, top 25 mid-cap, and top 35 small-cap stocks, selected based on their 6-month average free float market capitalization.

A maximum of 75 stocks are selected from the Nifty 500, with each stock limited to a 10% weightage.

The Tata Nifty MidSmall Healthcare Index Fund targets the healthcare sector through two main segments: pharmaceuticals and healthcare services. With a focus on capturing the diverse facets of the healthcare sector, the index selects a maximum of 30 stocks from the Nifty MidSmallcap 400 universe.

Comprising a minimum of 10 stocks from the Nifty 500 at the time of review, the Tata Nifty Realty Index Fund ensures a comprehensive representation of the realty sector.

These companies are selected based on their average free-float market capitalization (FF market capitalisation), with priority given to those with higher FF market capitalisation.

The Tata Nifty Financial Services Index Fund is constructed with a maximum of 20 stocks and imposes strict limits on single stock weight, not exceeding 33% of the total weight, and restricts the cumulative weight of the top 3 stocks to no more than 62%.

The Tata Nifty Auto Index Fund selects 15 stocks from the auto sector within the Nifty 500 universe, based on free float market capitalisation.

To ensure diversification and risk management, the index imposes a single stock cap of 33% and limits the cumulative weight of the top 3 stocks to 62%.

The Tata Nifty 500 Multicap India Manufacturing Index Fund has a diversified portfolio comprising the top 15 large-cap, top 25 mid-cap, and top 35 small-cap stocks, selected based on their 6-month average free float market capitalisation. CNBCTV18